My Two Cents
Wednesday, 15 January 2020 12:26

BREAKING: Warner Bros. and Universal Pictures announce the merger of their home entertainment disc operations

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What a way to follow-up my state of the home video industry report circa CES 2020 yesterday!

The news is breaking this morning that Warner Bros. and Universal Pictures are going to be merging their physical media distribution operations. The combined venture will distribute Blu-ray, DVD, and 4K Ultra HD discs in North America over the next decade, beginning in early 2021.

The merger will first have to be approved by the United States Justice Department.

Universal Pictures Home Entertainment president Eddie Cunningham will lead the new venture. [Read on here...]

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Internationally, Warner will distribute Universal titles in United Kingdom, Italy, Belgium, The Netherlands, and Luxembourg. Universal will distribute Warner titles in Germany, Austria, Switzerland, and Japan.

The Digital distribution operations for each studio will remain as they are, while marketing will continue to be handled by each individual studio for their own titles.

One key question that remains open is: How does this impact each studio’s licensing deals with third-party indie studios, if at all? Another is: How might this impact the Warner Archive Collection? (My hope is that Universal deep catalog titles would simply become part of a joint “Archive” mix, especially given that Archive has been a very successful part of Warner’s disc op for years now.)

My reaction to all this? It’s smart! As I reported yesterday, physical media sales have seen double-digital declines for the last three years. By combining resources and sharing costs—and not duplicating their efforts—each studio’s share of profit from their own titles will increase, prolonging their support of physical media for as long as possible over the next decade. Honestly, I would not at all be surprised to see further industry consolidation in the months and years ahead.

Universal and Warner presidents Peter Levinsohn and Ron Sanders had this to say about the announcement:

“As the home entertainment landscape evolves, we are continuously working to deliver the best entertainment range and value to our fans,” said Sanders. “The physical business is still an important and active category for the industry. This proposed joint venture with Universal gives us the best opportunity to foster innovation in this business, optimize the physical offering and extend the lifespan of the format for our fans and consumers.”

“With market conditions and consumer viewing behaviors continuing to evolve, we wanted a partner who shares in our commitment to deliver the best consumer proposition going forward,” Levinsohn said. “This proposed JV presents a significant opportunity to continue to work with our retail partners to ensure the format’s strength and sustainability for years to come.”

You can read more on all this today at Deadline, Media Play News, and Variety.

That’s all for now. Stay tuned...!

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